The recent passage of the Chips and Science Act in the U.S. Senate will invest over $50 billion to develop microchips in states like Michigan.
"This package is incredibly important to make sure that manufacturers stay in the United States," said Michigan Senator Gary Peters. "We know that they had offers from the Chinese government from the European Union, because everybody wants to have these produced in their country because they know it's absolutely essential to the future."
Currently, the U.S. relies on countries like Taiwan to manufacture microchips that help cars and other important technologies work. Global supply chain disruptions have caused chip shortages across the nation and lawmakers say that poses a national security risk.
“From cars to home appliances to cellphones, our everyday lives depend on semiconductor chips. This shortage has hurt Michigan autoworkers, businesses and families,” said Senator Debbie Stabenow in a written statement.“ That’s why I led the effort with Senator Peters to secure dedicated funding for chips used by the auto industry. This bill makes important investments in American manufacturing while lowering costs, bringing hundreds of thousands of jobs home, and strengthening our national security.”
In recent weeks, thousands of manufactured cars in Flint have been dormant due to a lack of chips.
However, this legislation will not fix the immediate need for microchips in car manufacturing plants. Instead, Senator Peters says this addresses a problem not just for today, but the future of manufacturing, especially in the automotive industry.
"This is a problem that actually gets bigger over time. And it gets bigger for the auto industry in the fact that electric vehicles require more chips. And that as they work towards changes in mobility, self-driving cars autonomy," said Peters "Self-driving autonomous cars require even more chips."
The bill incentives chip makers to build new manufacturing facilities in the U.S., but that could take years. And it’s still unclear where corporations might set up shop.
"It's hard to say where they'll be in Michigan, there are a number of plants I know I've talked to semiconductor companies that are looking at Michigan as a as a place to set up shop," said Peters.
The bill also invests $170 billion in research and development for cutting-edge scientific advancements.
According to a recent study, an investment of $50 billion to incentivize domestic semiconductor manufacturing would create 280,000 new jobs in the U.S. economy of which 42,000 would be directly employed in the semiconductor industry. It would ultimately add an estimated $24.6 billion annually to the U.S. economy over the next five years.
The bill passed the U.S. House of Representatives and now waits for President Biden's signature.